Rics - house price falls for sixth consecutive month

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by Kay Murchie

According to the Royal Institution of Chartered Surveyors (Rics), the number of UK surveyors reporting house price falls grew for the sixth month in a row last month.

Nearly 55% more surveyors announced a decline rather than an increase in property prices last month - up from 49% in December.

Rics said such a trend has not been experienced since the housing recession in the early 1990s.

According to Rics, the credit squeeze is continuing to have an impact on the property market. Jeremy Leaf of Rics said a lack of demand and confidence in the housing market is evidently behind the recent price slowdown.

Interest rates were cut last week from 5.5% to 5.25% so if mortgage lenders filter the recent interest rate cuts into the market, demand should begin to rise, added Mr Leaf.

Rics figures also unveiled the stock of unsold property on surveyors’ books rose by over 10% in January and by more than 40% since September. The average level of unsold property per surveyor was 85%, the highest figure for 9 years.

The figures reflect those from the Halifax bank and the Nationwide Building Society who announced falls in annual house price inflation.

The Halifax said annual house price inflation was 4.5% in January while the Nationwide said the annual rate of price growth fell to 4.2% in January - the lowest level for 2 years.

However, the Rics survey established that the only area of the UK that prices continued to rise was Scotland.

Last month, Allied Surveyors predicted that houses in Scotland could avoid the slowdown in property prices that many experts are forecasting for the UK this year.

Allied Surveyors expect house prices in Scotland to experience price increases of between 5% & 7% during 2008.

Furthermore, Halifax Estate Agents tipped 4 Scottish towns as potential property hotspots for 2008.